Once your offer is accepted by the seller, you will need to have a licensed property inspector inspect the property immediately. You may elect to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). If you are purchasing a commercial property, then you will need to have an environmental audit done on the site for the lending institution. This should all be done in a timely fashion. We can recommend several different inspectors.
Depending on the outcome of these inspections, one of two things may happen:
- Either each milestone is successfully closed, and the contingencies will be removed, bringing you one step closer to the close, or
- The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract (usually the price).
You will need to select an attorney to handle the contract and closing process. The attorney will negotiate the terms of the contract with the seller’s attorney. Once a satisfactory contract is ready, you will be required to put a deposit, traditionally 10% of the purchase price regardless of what the final down payment will be. Your attorney will also order a title search and title insurance to make sure there are no outstanding liens, and that the property can be transferred unencumbered.
I can recommend several attorneys for you to choose from.
- Preselect your attorney before you start negotiating on a home as you will need to be prepared to sign a contract rapidly.
- If purchasing a cooperative. Make sure your attorney has experience in this area.
How to Hold Title.
You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.
Appraisal and Lending.
If you are financing, It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc double check with your lender to be sure the loan will go through smoothly and on time. I will be involved with the appraiser and will supply access as well as comparable sales to help in the process.
If the property that you are purchasing is conditional upon board approval, request the rules, regulations, and other important documents from the seller as soon as you have an effective agreement to purchase. Make sure that the application documents and processing fees are submitted to the appropriate person at the management company by the required time. Usually upon receiving a written commitment if financing, or within 30-45 days if all cash. Fill out all of the information completely and legibly so there is no delay in processing the application. Make sure to review the completed package with your agent prior to submission. If you are required to meet with the board for your approval, you will have to wait for the management company and board to review your application prior to the interview.
If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance. You can also save money with these tips.
- Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
- Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts.
- Insure your house NOT the land under it. After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
We will be happy to recommend experienced knowledgeable insurance agents for every property type.